The Benefits of Filing Tax Returns Even if You Can’t Pay What You Owe
With the October 15 extended tax filing deadline looming, St. Louis tax attorney Mark Milton advises taxpayers to file even if they currently cannot pay what they owe.
This could be one of the busiest extended tax filing periods in recent memory because many taxpayers filed an extension before the July 15 tax deadline because of soaring unemployment caused by the COVID-19 pandemic.
“A lot of people have fallen on hard times, and they may have filed an extension just trying to delay if they’re going to owe money, but don’t miss this October 15 deadline even if you owe a large amount because the IRS can hit you with substantial penalties,” Mark advised.
A Failure to File penalty can be almost as damaging as a Failure to Pay penalty, but there are different alternatives to resolving your tax debt if you cannot pay what you owe, such as:
- Establishing a payment plan with the IRS; or
- Applying for Currently Not Collectible status, so if the IRS determines you cannot currently pay your tax debt at that time, then they may temporarily delay collection efforts until your finances improve; or
- An Offer in Compromise (OIC) where you may be able to pay your tax debt for a percentage of what you owe. In some cases, an OIC can save you tens of thousands and maybe even hundreds of thousands of dollars, depending on the size of your tax liability.
“Too many times I see people allow their tax problems to snowball on them, which makes it much more difficult to try and resolve the issue,” Mark said. “The IRS can be fairly understanding and forgiving if you come forward and file the returns and make arrangements to pay. But continuing to bury your head in the sand is not going to get you very far, and it will catch up to you in the form of bank garnishments, tax liens, and other collection methods available to the IRS.”
If you need a tax attorney in St. Louis to help with your tax issues, then give Milton Law Group a call today at 314-394-3370 for a consultation to discuss your options.
Click this podcast link or watch the video below to listen to St. Louis tax lawyer Mark Milton discuss the October 15 extended tax deadline.